The Energy Regulation and Markets Review - Stikeman Elliott

United Arab Emirates
MIST is likely to play a leading role in development of advanced technologies in
the UAE in the coming years.
VI
THE YEAR IN REVIEW
The UAE has seen double-digit increase in the demand for electricity in the past few
years and is expected to continue seeing rapid growth in the coming years.
In order to meet this growing demand, Abu Dhabi has allowed private power
companies to participate in its energy sector for a number of years. More recently, due to
the rapid growth in demand for power in the country, Dubai and the federal government
have both launched initiatives to permit private sector participation in the generation of
electricity. Dubai enacted the Dubai Electricity Law and the FEWA Law was amended in
2008 to enable private investment in the sector. Transmission and distribution continues
to be owned by the state owned monopolies.
The need for specialised regulation is recognised and Dubai has enacted a number
of laws to modernise its regulatory framework. Two specialist regulators for the energy
sector, the SEC and the Office, have been established, with the latter focusing primarily
on electricity. The enactment of the Dubai Electricity Law can be directly attributed to
the creation of these specialist regulatory bodies.
High subsidies and heavy reliance on fossil fuels for generation have resulted in
the UAE having one of the highest per capita carbon footprints in the world. Rising fuel
prices have created a growing recognition that the energy demand cannot be met only
with investment on the supply side but that demand-side management programmes and
energy conservation measures are equally important in matching demand with supply.
Increases in electricity tariffs coupled with the introduction of slab tariffs in Dubai and
the northern emirates have helped curb demand growth in these areas and relieved
pressure on the sector. Due to the effectiveness of the slab tariff introduced by DEWA,
Abu Dhabi is also proposing to introduce a slab tariff in the near future.
Green building regulations and a mandatory rating scheme have been introduced
in Dubai and Abu Dhabi respectively to encourage energy conservation.
The country has set itself the goal of ensuring 7 per cent of its energy requirements
in 2020 are met from renewable sources. Dubai has set itself a target of generating about
one-third of its energy from clean, renewable or nuclear sources by 2030. To meet these
targets, a number of projects have been launched.
Dubai has recently inaugurated a solar energy park which will, on completion in
2030, have the capacity to produce 1,000MW of electricity.
Abu Dhabi has launched the zero carbon emissions/zero waste Masdar City
project to be powered exclusively by renewable energy sources. ADFEC, the owner of
the project, has started work on development of a number of renewable energy projects,
including solar and wind.
A specialist regulatory body for the nuclear energy sector has been created. New
regulations governing various segments of the nuclear chain are being developed and
issued. Construction work on a nuclear power plant is currently underway at Braka in
the emirate of Abu Dhabi, and commissioning is expected in 2017.
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